Wednesday, November 4, 2009 6:55 AM
Upbeat earnings pull European stocks higher
Globe and Mail staff
European stock markets recovered Wednesday, helped by upbeat earnings reports across the region ahead of the latest economic update from the U.S. Federal Reserve.
Sentiment was buoyed by some forecast-busting earnings from the likes of British retailer Marks & Spencer PLC, French bank Société Générale SA and German sportswear company adidas AG.
Though the earnings helped provide some support in Europe’s markets, investors are warning of volatile trading in the hours and days ahead amid a raft of economic news, particularly from the U.S.
Wall Street was expected to open higher and recoup Tuesday’s losses. Investors will be watching the latest jobs survey from the ADP payrolls firm for clues to Friday’s closely watched government non-farm payrolls data for October, which often set the stock market tone for weeks. A monthly survey from the Institute for Supply Management will also be eyed for signs the services sector is growing strongly.
Later, the Fed takes centre stage when it unveils its latest interest rate decision. Though no shift in interest rates is expected, investors will be on the lookout for any changes to the accompanying statement.
Gold hit record highs above $1,095 an ounce on Wednesday as dollar weakness added to momentum lent to the market by India’s purchase of 200 tonnes of gold from the IMF to push prices through key technical resistance levels.
Gold is now poised to target the psychological $1,100 an ounce level, dealers said.
The U.S. dollar fell against a basket of currencies, helping to send gold prices higher and lifting oil. A weaker dollar makes commodities like oil cheaper for those holding other currencies.
Oil rose above $80 a barrel, extending the previous session’s near 2-per-cent gain, following a U.S. industry report showing an unexpected fall in crude stocks and supported by a weaker dollar.
